Guaranteed payday loans are loans that a third party (usually government) provides if the borrower can’t pay off the debt independently (usually is bankrupted). Often, the government agency purchases the loan from the financial institution and takes responsibility for it.
Sometimes borrowers apply for guaranteed approval loans if they are unattractive candidates for a loan. A reputable guarantor (a third party) is a convincing proof for a lending institution to approve the loan.
Guarantors usually don’t accept the entire liability. They can agree to pay off the interest or the principal only. In most cases, if the loans are substantial, there is more than one guarantor. Each guarantor is responsible for separate part of the loan. Sometimes if any of the guarantors fails to pay off the portion of the loan, other guarantors should pay off the portion independently.
Guaranteed payday loans no matter what are popular among students as they often can’t provide substantial proofs of their creditworthiness.
SBA or the Small Business Administration are U.S. government-backed term loans that are available at most banks and commercial lending institutions. They give banks some comfort zone to approve loans or allow borrowers to repay loans over a longer period.
The substantial disadvantage of the SBA loans is a legendary paperwork that surrounds the application process no matter what. Still, it also can be a working solution when the lender requires the guarantor.